What Rights Holders Need to Know as the Court Landscape Continues to Evolve

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The intellectual property enforcement landscape in India has witnessed a cascade of changes and developments in the past few years. With a view towards improving the overall ease of doing business in India, major legislative and institutional changes have been brought in by the Indian government aimed at streamlining the Indian intellectual property (IP) enforcement landscape. From prescribing stricter procedures and timelines for adjudging IP disputes, to transferring powers of erstwhile tribunals to the high courts, the changes have been far and wide. Along with institutional changes, courts are also constantly weaving changes into the fabric of the IP landscape through evolving case law.

Some of the major developments in the Indian IP framework that can help right holders make informed choices about the strategies to be adopted for protecting and enforcing their valuable IP rights in India are as follows.

Changes in statutory regime

The Indian judiciary has been, for various sociopolitical reasons, reeling under the pressure of a huge backlog of cases for decades. Overflowing dockets, coupled with lax restraints to discourage parties from indulging in dilatory tactics, resulted in matters getting routinely relisted for hearings, making quick disposal practically unachievable. Realising that these issues, felt ever more strikingly in IP disputes entailing urgent relief, could jeopardise India’s aims of attracting foreign investments, certain changes were promulgated by the Indian legislature.

The first was the introduction of the Commercial Courts Act 2015 (CCA) and corresponding amendments to the Code of Civil Procedure 1908 (CPC). Owing to these changes, commercial disputes, including IP disputes, now proceed on much stricter, and largely non-extendible, timelines. The changes have also made it difficult for parties to get away with filing frivolous or vexatious claims and defences. The amendments have further ushered in the concept of case management procedures, allowing judges to monitor the timelines of litigation. Further, the CCA has also mandated exploration of mediation by parties before entering into litigation, except in matters contemplating urgent interim relief.

This was followed by a major institutional change with the introduction of the Tribunals Reforms Act 2021 (TRA). The enactment of the TRA saw the abolishment of the Intellectual Property Appellate Board (IPAB), the erstwhile forum for deciding appeals of orders of the Trade Marks Registries and Patent Office, etc, and for deciding rectification and cancellation actions against IP registrations. The TRA transferred the entire gamut of the IPAB’s jurisdictional powers to the Indian high courts.

Establishment of IP divisions at high courts

Post the abolition of the IPAB, all matters that were pending before it stood transferred to the high courts. This sudden influx of a large number of matters posed a massive challenge for the high courts to ensure that this transition was smooth and without hiccups.

Leading the way towards dealing with this challenge was the Delhi High Court, which established a dedicated Intellectual Property Division (DHC-IPD) within a few months of the disbandment of the IPAB. The Madras High Court followed suit by establishing its own IP Division early this year.

The DHC-IPD has designated specific benches for adjudication of IP disputes, which are administered under procedural rules tailored specifically for the purpose. The rules adopted by the DHC-IPD offer some novel and bespoke features, which have not only streamlined the transition from the IPAB, but also generally benefited the process of deciding IP disputes. These include setting up of ‘confidentiality clubs’ for enabling the exchange of confidential information between parties, as well as the concept of ‘hot tubbing’, where evidence of two opposing experts appointed by the court for rendering technical assistance is taken concurrently. The DHC-IPD rules also encourages parties to explore mediation, and courts under these rules are empowered to appoint a mediator or panel of mediators for resolution of a matter at any stage of the proceeding, even without the parties’ consent. Additionally, recognising the pertinent challenges thrown up in cases involving standard essential patent (SEP) infringement, the rules have also introduced provisions dealing specifically with certain aspects involved in SEP disputes, including enabling courts to pass directions for monetary compensation instead of injunctions, if infringement is prima facie established.

Unfortunately, however, apart from Delhi and Madras, where IP disputes are now, owing to the dedicated IPDs, being disposed of expeditiously, other courts are yet to follow suit; although, there is hope that in the coming months, a structure will be put in place.

Notable developments in the arena of SEP licensing

Notable developments have taken place in the field of SEP licensing that impact the manner in which rights holders traverse the sea of SEP protection and enforcement in India.

The Delhi High Court recently rendered two landmark two-judge bench decisions, in Intex Technologies v Telefonaktiebolaget LM Ericsson (2023:DHC:2243-DB) and Nokia Technologies OY v Guangdong Oppo Mobile Telecommunications Corp Ltd & Ors (2023:DHC:4368-DB), which have shaped the SEP litigation space in India for the future. Through these decisions, the court condemned holding-out techniques resorted to by implementers during SEP licence negotiations. The court categorically observed that FRAND requirements impose obligations on both the SEP holder as well as implementers, and that the implementers must either accept the offer made by the SEP holder or make a counteroffer with security payment to protect the interests of the SEP holder. The benches in the two decisions also denounced the four-fold test laid down by a single judge of the Delhi High Court in a previous decision for payment of security amount by the implementer. The single judge of the Delhi High Court in this decision had made payment of security amount by the implementer contingent on the SEP holder first showing an admission by the implementer regarding infringement, validity, utilisation and the FRAND nature of the SEP owner’s offer. The two-judge bench further observed that there was no requirement for an SEP holder to map an implementer’s product to the asserted standard for claiming pro-tem payment in respect of the alleged infringement, and that injunction can be granted on the whole of the infringing device by demonstrating infringement of one SEP alone.

Thus, the Delhi High Court has paved the way for SEP holders to effectively assert and protect their SEPs in India and, after examining the legal position concerning SEPs prevalent in other jurisdictions, has attempted to ensure that implementers are not granted an unreasonable leverage over SEP holders.

Usage of trademarks as ad words

In yet another development peculiar to the age of the internet, courts in India have been frequently facing the question of whether the use of keywords that are identical or deceptively similar to registered trademarks as part of the Google AdWords program, by advertisers, would amount to trademark infringement.

The position in this regard was dictated until August 2023 by the decision of a single judge of the Delhi High Court in DRS Logistics v Google India Pvt Ltd & Ors [2021:DHC:3482], which held that advertisements that do not feature a trademark visibly but use them as a keyword can create confusion as to the origin of goods and services, and that the overall effect of the advertisement needs to be investigated to ascertain if the said advertisement can be said to cause confusion, in which case it would amount to infringement.

Google appealed this judgment and the decision in the appeal was delivered on 10 August 2023, where, while partly rejecting Google’s appeal and upholding the decision of the single judge on most counts, the two-judge bench passed some clarifying observations. The appeals court, concurring with the decision of the CJEU in Google France SARL and Google v Louis Vuitton Malletier SA & Ors [(2011) All ER (EC) 411], upheld the single judge’s observations that use of trademarks as keywords constitutes ‘use’ in the trademark sense, and that it was not necessary for the registered trademark to physically appear in an advertisement to constitute use. The two-judge bench also observed that as Google’s role in promoting and suggesting use of trademarks as keywords is anything but passive, this use, if found infringing, would be considered use not only by advertisers but also by Google. The bench further observed that as use of keywords increases traffic on the subject websites, and results in revenues for Google, it could not be said to be immune from liability for trademark infringement. Notably, however, the bench also held that unless it is established by the registered trademark owner that unauthorised use of its trademarks as keywords has resulted in confusion, no liability for infringement would arise.

The above judgment provides sufficient clarity for right holders who feel aggrieved by unauthorised use of their trademarks for the purpose of advertisements by third parties not only on Google’s search engine, but also over any other platform that has a search-based functionality.

Patent protection for computer-related inventions

The position under Indian patent law with respect to patentability of computer-related inventions (CRIs) has been quite murky. This is primarily owing to an express statutory bar existing under the Indian Patents Act 1970 deeming ‘mathematical or business method or a computer programme per se or algorithms’ to be ineligible for protection. This provision has been the subject of much deliberation by courts in different cases, and the interpretation accorded to the words ‘per se’ in the provision has been largely inconsistent.

The patentability of CRIs was examined by the Delhi High Court in 2019 in Ferid Allani v Union of India & Ors [2019 SCC OnLine Del 11867], which ruled that the statutory provision cannot stand in the way of genuine inventions based on computer programs being protected. The court relied upon the Patent Manual published by the Indian Patent Office in 2019, as well as the latest guidelines issued by the Patent Office in relation to CRIs, which provide that the statutory prohibition must only restrict computer programs as such from being considered patentable, and that inventions that involve a technical contribution or effect beyond the program itself can be considered patentable. However, inconsistency and lack of clarity in the approaches adopted by patent examiners persisted.

The issue thereafter came up in May 2023 before a single judge of the Delhi High Court in Microsoft Technologies v The Assistant Controller of Patents and Designs [2023:DHC:3342]. The Patent Office had, in the order under appeal, refused to grant a patent on the ground that the claimed invention is merely a set of computer executable instructions and algorithms, constituting ‘computer programs per se’.

While hearing the challenge to the refusal order, the single judge expressed that despite the observations of the court in Ferrid Alani (supra) and the express language contained in the CRI Guidelines and the Patent Manual, examiners at the Patent Office were placing undue reliance on the inclusion of a novel hardware for the patentability of CRIs. The court observed that if a computer-based invention provides a significant technical contribution or effect or has some other technical benefit, then the fact that the invention involves a mathematical or computer-based method would not preclude it from being patentable. Accordingly, the order was set aside.

The single judge also offered a word of advice to the Patent Office, stating that it should consider providing illustrations and examples within the examination guidelines of both patent-eligible and ineligible inventions, for offering clarity to patent examiners while dealing with such matters.

These judgments were recently followed and reaffirmed in another single judge bench decision of the Delhi High Court delivered on 15 September 2023 in Raytheon Company v CGPDTM (2023:DHC:6673) where, placing reliance on the decisions in Ferrid Alani (supra) and Microsoft Technologies (supra), the court found to be unsustainable another order of the Patent Office that had placed undue insistence on inclusion of novel hardware in a CRI for being considered patentable, without giving any findings on the technical effect or contribution of the invention in question.

This judgment comes as a welcome step for inventors looking to patent their CRIs who were, until now, caught in two minds over the ambiguity existing at the level of the patent examiners.

Jurisdiction to decide trademark/design/patent cancellation petitions

Post the abolition of the IPAB, questions arose as to which high court would have jurisdiction over original cancellation actions and appeals from the orders of the respective IP offices. While the IPAB was functional, these cancellations and appeals used to lie at one of the five IPAB benches that had jurisdiction over the concerned IP office where either the application for the said IP (patent, trademark, etc) was filed, or that had passed the order under appeal.

The Delhi High Court had answered this question in relation to patents in November 2022 in the case of Dr Reddys Laboratories Ltd v Controller of Patents & Ors (2023:DHC:004746); patent revocation petitions would lie at any high court of the petitioner’s choosing, if it can show that the petitioner’s commercial interest is affected under the jurisdiction of that high court. However, as regards appeals from orders of the patent office, the court ruled that these appeals would continue to lie at the high court within whose jurisdiction the Patent Office where the application for grant of patent was originally filed is situated.

This test of extending jurisdiction for deciding original cancellation actions to any high court where the exclusionary effect of the registration is felt, irrespective of the location of the IP office where the application for registration of the IP was filed, was recently extended by the Delhi High Court to trademark cancellation petitions in the case of Centre Consortium LLC v Krunal Harjibhai Sardhara (2022:DHC:6234). The Delhi High Court ruled that a cancellation petition against a registered trademark can be filed before any high court if it can be shown that the ‘dynamic’ or exclusionary effect of that registration is felt within that high court’s jurisdiction, notwithstanding that the mark was granted registration by a trademark office located in the jurisdiction of another high court.

The decision holds significant value, as not only does it open the floodgates for high courts to hear and decide trademark cancellation petitions that are located even beyond their respective jurisdictions, but it has also made trademark owners susceptible to facing cancellation actions by third parties at any high court across the country.

Conclusion

The legislative and institutional changes introduced to the IP regime in the recent years have had a visibly positive impact on the efficiency of courts in disposing of IP disputes. The changes come as a welcome step for IP holders seeking to obtain protection for and enforcing their IP rights in India. The decision rendered by the two-judge bench in Nokia v Oppo also offers promising signs for SEP holders, who can look up to Indian courts as a SEP-friendly jurisdiction, with assurance that unwilling licensees will be now put to task by Indian courts.

Further, the regime changes have also increased the oversight of high court judges over the decisions and functioning of the respective IP offices, whose officers are now mindful that any inconsistency in their decisions will be scrutinised. This is expected to bring an increased sense of responsibility and uniformity in the functioning of the IP offices. However, the glaring issue of effectively filling in the void left by the abolition of the IPAB is still left to be addressed, and the government as well as the courts need to work towards remedying this gap as soon as possible.

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